Oil prices head for weekly loss on Omicron variant uncertainty

Oil prices dipped on Friday, putting the market on track for a weekly loss, as surging cases of the Omicron coronavirus variant raised fears new curbs may hit fuel de-mand. Brent crude futures fell $1.48, or 1.97 per cent, to $73.54 a barrel at 8.40 pm (IST), while US West Texas Intermediate (WTI) crude futures dropped $1.45, or 2 per cent, to $70.93 a barrel. 

Brent and WTI are both headed for a 1.4 per cent loss this week.

“Messages of caution and warnings of a worsening Covid wave are starting to ring louder with the approach of the year-end holiday season, dampening market sentiment,” said Vandana Hari, energy analyst at Vanda Insights. “Crude may remain in a holding pattern.” 

But Goldman says oil at $100 is possible

Oil at $100 a barrel cannot be ruled out in 2023 as supply additions are expected to be too slow to keep up with record demand, according to Goldman Sachs Group.

While the bank’s base forecast is for Brent to stay around $85 next year and 2023, it could breach triple digits through either higher cost inflation for drillers, or if an unexpected supply shortfall forces prices to spike high enough to destroy demand, said Damien Courvalin, head of energy research.